Obamacare creating nightmares for small businerss

NY Times: For some business owners on the edge of the cutoff, the mandate is forcing them to weigh very carefully the price of growing bigger. “There’s kind of a deer-in-headlights moment for those who say, ‘I have this new potential client, but if I bring them on, I have to hire five additional people,’” said Philip P. Noftsinger, the payroll unit president at CBIZ, a financial services provider for businesses. “They’re really trying to assess how much the 50th employee is going to cost.” 

Nearly all large companies provide health care benefits, but only 54 percent of businesses with three to 49 workers offered coverage to their workers this year, according to an analysis by the Kaiser Family Foundation. Paying even a portion of the cost can be expensive. The average annual premium for workers at small companies currently tops $6,100 for individual insurance and $16,600 for family coverage. That premium is typically shared between the employer and employee. 

Businesses that fall under the health care law’s mandate are required to offer their workers “affordable” insurance, which the law defines as individual coverage that costs less than 9.5 percent of the employee’s household income. (Because employers do not know how much money their workers’ relatives make, their options for compliance include basing their calculation on only their own employees’ wages.) For a full-time, minimum-wage employee making $14,500 a year, an employer offering an average-price individual plan would have to pay around $4,700 a year.  Added to that cost are the administrative requirements. Starting this year, all companies with 50 or more full-time workers — even those not yet required to offer health benefits — must file new tax forms with the Internal Revenue Service that provide details on employee head count and any health insurance offered. Gathering the data requires meticulous record-keeping. 

“These are some of the most complex informational returns we’ve ever seen,” said Roger Prince, a tax lawyer with the consulting firm Berry Dunn in Portland, Me. Some of his clients, even small ones, have spent months reconfiguring their human resources and financial systems to track the information that the new forms demand. The health care law defines a full-time-equivalent employee as someone who works an average of 30 or more hours a week — and the hours worked by some part-time employees count toward the calculation.

If it is this bad for the private sector then think how much adaptation the public sector needs.